Rent the Runway is in the midst of talking with banks as it makes moves toward an initial public offering (IPO) that could take place sometime in 2021, Bloomberg reported on Thursday (June 3), citing sources.
The New York-headquartered startup had been valued at $1 billion at its funding round in 2019. Funding last year put the company at a $750 million valuation. An IPO valuation is not known, per Bloomberg.
Launched in 2009 by CEO Jennifer Hyman and Jenny Fleiss — who exited the firm for a Walmart venture — the company strives to offer women a rent-to-wear option of designer dresses and fashions for special occasions. The startup expanded to offer subscriptions for everyday wear and recently moved into the resale clothing market.
According to Bloomberg, Hyman told The New York Times last month that the firm has seen active subscribers grow 92 percent since last May, tracking to outpace pre-pandemic levels. Actress and wellness brand authority Gywneth Paltrow joined the company’s board of directors, RTR said last week.
Rent the Runway’s jump into the resale apparel market gives people the ability to rent designer clothing in addition to purchasing the outfits — without a membership fee. The move follows the devastating effects of the COVID-19 pandemic and the resulting reduction in events and social gatherings as people hunkered down to work and school from home. The U.S. resale market is forecast to go beyond $33 billion by the end of 2021 and could reach $64 billion by 2024.
Fleiss, who is now partnering with Volition Capital after leading Walmart’s personal shopping service, told PYMNTS’ Karen Webster that she has learned to be capital-efficient, inventive and profitable. Her new venture with Volition Capital focuses on capital-efficient startup firms with funding generally in the $10 million to $40 million range.